How to calculate heatsink requirements

The data sheet says junction to ambient is 50 degrees C per watt, so yes if the ambient was at 0 degrees C then the junction would be at 250C, which is too hot.
Therefore you need to reduce this figure by adding an external heat sink.
That link shows you how to do this as does the equation that dc42 posted. You can think of thermal resistances like electrical resistances and the thermal gradient (difference in temperature between the junction and the ambient) as the voltage across the resistance.
So to have a junction temperature of 100C with an ambient of 30C you have a 70C thermal gradient. So the total thermal resistance needs to be less than 70C / 5W = 14 degrees C per watt. You already have an inbuilt thermal resistance of 0.9 (lets call it 1), so your heat sink needs to be 14 -1 = 13 degrees C per watt.
So look for a heat sink with that resistance or smaller.